Monday, September 28, 2009

Radio: Triton the titan

I’m a firm believer that radio’s future lies with streaming and mobile – not HD Radio.

But I must
preface that by voicing concern with Triton Media Group’s recent acquisition of Ando and Spacial, which were announced in a one-two punch just prior to the NAB Radio show convo and the RAIN Summit in Philadelphia last week.

These mergers provide Triton a vested interest in companies that control all aspects of producing revenue to on-line radio.

Triton’s backed by Oaktree Capital Management.

I’m curious how one company can legitimately provide streaming radio (either through hosting or software), sell advertising and also be an on-line ratings service.

The way I read it, these mergers provide Triton a vested interest in companies that control all factors of producing revenue to on-line radio.

That’s a lot of power and control for Mike Agovino, the CEO of Triton and following these mergers, the Capo di tutti capi of on-line radio.

Agovino’s been in the radio biz for 25 years and is a former resident of the Clear Channel-owned Katz Radio and Katz Interactive, COO of Clear Channel Radio Sales, and co-COO of Interep National Radio. Small world.

Keep in mind that those under the Triton umbrella worked out a collective deal with the Record Industry

Association of America’s SoundExchange with rates they can afford.

And this is strictly the Triton cartel we’re dealing with here. I said it in July and I’ll say it again.

Only the largest independent webcasters will survive: Accu-Radio, Radioio, Pandora, and Digital Imported/Sky FM.

SoundExchange, which is the collection arm of the RIAA takes 25 percent of webcasters’ gross revenues – not net - and their take is not limited to just what is earned on-air. If a webcaster sells merchandise, whether it’s T-shirts, coffee

cups, or hats –25 percent gross – right off the top – will go to SoundExchange/RIAA.

The big four label groupsSony/BMG, Warner Music Group, EMI, and Universal Music Group, through the RIAA will own a 25 percent equity with independent Internet radio stations that play music controlled by the RIAA.

Pay-for-play, payola and other shady deals to manipulate airplay are not illegal for Internet radio. The Big Four will be free to cut side deals – like buying blocks of time for airplay.

It’ll be the RIAA’s version of green - recycling dead presidents.

Follow the money. It always leads to more money.

Now, I’m not saying that Triton would put the lean on the right people to insure that its competitors stay – or become – obscure, so as not to be a hindrance.

But it could easily do so if it wanted to.

If that’s the ticket, the future of Internet radio in the U.S. – particularly independent stations – and start-ups yet to come could be slim to none.

Like Michael Corleone said to his brother Sonny in The Godfather, It's not personal, Sonny. It's strictly business."

If you have an edge in business, you take it. I would. You would.

I’m not sure if this falls in the category of smooth operator or shrewd operator or both. Agovino saw the opening and went for it.

I know, I know. You could say Triton’s not a monopoly. There’s TargetSpot. Okay, I said it. Let’s

move on.

While terrestrial radio wallowed in its self-inflicted misery at the NAB Radio Show in Philadelphia last week, Agovino’s Triton and the new Internet radio cartel were plotting the future.

Terrestrial radio’s streaming audio has already been screwed, blewed, and tattooed beyond recognition by the damaging deal done by David

“Fumbles” Rehr on behalf of the NAB with the RIAA. They ate Fumbles for breakfast, lunch, and dinner. And they handed terrestrial radio the tab.

But let's not worry.

Now we have Gordon Smith.

If the taxaholics at the RIAA get their way, they’ll tack on a performance fee for music broadcast on traditional AM and FM, too, which will lead to a whole lot of new news and talk formats.

Back to Triton. If I’m reading this deal the wrong way, I’d like to know – but I don’t think I am.


More 1979 interviews from Radio Music Report

Thursday, September 24, 2009

Radio: What was the NAB's Gordon Smith thinking?

Were you wondering what the new National Association of Broadcasters President and CEO was thinking while delivering his speech at the NAB Radio Show this past week?

Gordon Smith: It is an honor and a privilege to stand before you as the incoming president and CEO of the National Association of Broadcasters.

(Thinking: Hmmm…maybe I shouldn’t have jumped at the first offer.)

I’ve been fortunate to meet with many of you and learn more about the challenges you face, and the opportunities that lie before you in this digital age.

(What did I get myself into? ‘Challenges? “Opportunities?’ Who wrote this piece of high school crap?)

It’s both an exciting and a challenging time for the broadcasting business, and I plan on hitting the ground running

as your president and CEO to ensure your voices continue to be heard back in Washington, D.C.

(Did I really just say “hit the ground running?” That’s rule number one in Speechwriting for Dummies. Don't use old clichés from Mad Men scripts.)

As a member of the Senate, I worked across party lines to get legislation passed.

(I just wanted to be on the side that’s winning. What's wrong with that?)

Now, my politics are the interests of the National Association of Broadcasters, which

translates into serving radio and television broadcasters and the American people.

(What do I do now? I'm get paid by the people who are on the side that’s losing.)

Having served on the Senate Commerce Committee, I’m familiar with the issues that

impact America's local broadcasters.

(Whew! Glad I caught myself. I almost said 'America’s local bankers.' They don’t own the groups yet.)

I am also keenly aware of, and amazed by, the public service that you provide to your communities each and every day. In towns big and small, broadcasters provide their communities with national and local news, deliver informational programming, report vital emergency information and offer unparalleled entertainment choices.

(Yep. No doubt about it. I’m back in Washington all right. I'm back to lying through my teeth again.)

You are the glue that connects your friends, family and neighbors to each other.

(Glue? Ewwww…another Mad Men cliché?)

As broadcasters, you take seriously your responsibility to be a fundamental resource for your local communities and your commitment to providing public service. That is an awesome responsibility.

(I guess this job calls for a lot of lying….er...exaggeration.)

To call oneself a broadcaster, is truly answering to a higher calling.

(Who writes this stuff? Religious zealots?)

It’s knowing you’ve been entrusted with the public’s airwaves, and recognizing that what you report and air impacts the lives of your viewers. You serve your communities in remarkable ways, improving the quality of life and fostering the

principles of localism.

(Localism? The traffic reports I hear on radio report on accidents occuring at intersections that don’t exist!)

And it’s going to be my job to make sure policymakers and the rest of America understand the many ways broadcasters give back to their communities.

(Now, I get the joke about ‘What’s the difference between the NAB and the Liar’s Club?’ ‘Absolutely nothing.’)

America’s local radio and television stations are integral parts of the towns and cities they serve.

(I have to make a note and ask why they never pronounce the names of the suburbs correctly. Is this that newfangled voice-tracking thing I hear those radio guys whispering about?)

Broadcasters’ contributions to their local communities are diverse, en
ormously valuable and make a major impact on towns and cities all across the country-in large part because each individual station has the latitude to serve their audience’s unique and specific needs.

(Yeah, ask five Cumulus managers if they even know the name of the mayor in their city of license. Cumulus? Or was it Citadel? Or Clear Channel? CBS? It was one of those C companies. Maybe more than one? Maybe all of them?)

But many of the legal and regulatory challenges broadcasters face in Washington, D.C., such as the performance tax and the Satellite Home Viewer Extension and Reauthorization Act – or SHVERA – can affect your ability to support your communities and innovate to meet the demands of today’s rapidly changing media landscape.

(Make note to speechwriter. This is a radio convention, not a TV convention. These guys never even heard of SHVERA. Is that how you pronounce it?)

As Charles mentioned earlier, you have a dedicated team of professionals working to ensure you are represented in Washington, D.C.

(I feel like Pinocchio. I want to touch my nose.)

And I can not wait to join them. But as a former senator I know, that it is the commitment from association members – the grassroots strength of NAB – that makes an incredible difference. You must continue to come together to fight for the future of broadcasting.

(If you have to remind someone they have a future do they really have one?)

I want to commit to you, that you also have a new president and CEO who is dedicated to advocating on behalf of all broadcasters and focused on providing the best service

possible to our members.

(From what they told me about this Fumbles guy – I know not to write ten ten-page letters a day and carry around a can of Tab. Beyond that….what am I doing here? Maybe the frozen food business wasn't all that bad after all?)

Too often in Washington, D.C., we’re defined by labels. The label I want to be defined by now is chief advocate for America’s broadcasters.

(That’s what I get for not pre-reading this speech – even though the twenty-four people that prepared it assured me it was okay. Did I just say we shouldn’t be defined by labels followed by me asking to be defined by one? Make note….got to hire some new speechwriters.)

The issues that we face are many, and I know that there are challenges ahead.

(This is déjà vu. I used that same line when I took over the family frozen food business. People, please, I need some new clichés.)

But with input from our leadership and our members, we will focus on growing our strengths, improving our weaknesses and always serving as the premier advocate for America’s radio and television stations.

(Make note to destroy all copies of Speechwriting for Dummies.)

One of our great strengths is the value that we provide as free, over-the-air broadcasting. And we must continue to drive the rollout of innovative platforms to deliver your content and demonstrate the great possibilities of radio and television.

(I guess that means I have to cancel my Sirius subscription. I hate doing that. It’ll take forever. They just don't take 'no' for an answer.)

Charles spoke about the Radio Heard Here campaign and building a strong future for radio by embracing new

technologies. And we’re moving forward with these many initiatives like FM capable cell phones, HD Radio and Internet streaming.

(Did I really just say that? I’ve seen some bad campaigns in my life. Like my last Senatorial one. But this?)

These are all very exciting opportunities and it’s really encouraging to see radio come together and innovate in this digital age. And while I know this is a radio crowd, there is also much to look forward to with the advent of digital television. There are many doors opening for television broadcasters with the acceleration and development of mobile digital products and services. It's

amazing to think we will be able to watch live TV anywhere we are. Mobile digital television will transform the way we watch television.

Advances in technology are giving broadcasters opportunities to find better, more innovative ways to deliver the high-quality content and services that local communities expect and deserve. The ability of broadcasters to operate in a marketplace free of unnecessary regulation will only help to accelerate the development of new broadcast technologies.

You will be hearing more from me about these issues in the months ahead, so stay tuned.

(Okay, someone’s not paying attention. I specifically told these NAB idiots to cut the TV lines. These radio people don’t get it. I’m talking rubes…not tubes.)

It is exciting to see that broadcasters have their eyes on the future, and there are strong plans today to build a stronger tomorrow. I know that many of you are trying hard to survive in this challenging economy. I know it hasn’t been easy. But even in these difficult times, you are still there for your communities – always there to assist and provide a lifeline during times of crisis.

That is something you should all be proud of. And that’s one of the many reasons I’m proud to be here standing among you today.

(Damn. This is another line I used when I took over the family frozen food business. At least there I could hire immigrants and keep them part-time. Well, maybe radio could do the same thing? Make note - are there any laws against U.S. stations getting voice trackers from Bangalore?)

This is a strong industry with a bright future. And I am very excited to be a part of it. It is not only an honor to stand here among you – it is also an inspiration. Thank you for having me here today. I look forward to serving as your president and CEO and can’t wait to get started.

(Make another note….please call 'headhunter' back. I made a terrible, terrible mistake.)

Wednesday, September 23, 2009

Radio: The NAB Radio Show - Philadelphia Fiefdom

Radio gets no respect.

Even in the City of Brotherly Love.

NAB Radio Show conventioneers woke up this morning to an article in the Philadelphia Inquirer that reads Radio should pay those who make it rich.

The answer to the question is “yes.”

The question – Did the National Association of Broadcasters fail to do advance p.r. with the local media for the NAB Radio Show?

The answer to the question is “yes.”

The question - Did the Record Industry Association of America not forget?

The RIAA kept it live and local by merely inciting a small local indie music production company, Philerzy, to compose a prudently timed and positioned op/ed piece on the evils of the radio industry.

How many radio groups own stations in the Philadelphia market? Not a single one thought of commissioning their promotion and marketing department to work the local media and promote the NAB Radio Show as a constructive event?

The NAB has been planning its Radio Show convention in Philadelphia for – what? - over a year now? You’d expect the NAB would've spent a few bucks for some upbeat advance p.r. on their event.

After all, it squanders millions with the Radio Advertising Bureau on its worthless, pointless, no results "Radio Heard Here" promotion while continuing to hype the dead-on-arrival HD Radio swindle.

That’s okay. The NAB Gang of Four will blame the p.r. bumble on Fumbles. Chalk it off as just another one that David Rehr let fall through the cracks during his brief reign as NAB Capo di tutti capi.

Amazing. Yes, it’s going to be that kind of week.

The NAB should've hired Judy Collins to sing "Send in the Clowns."

So the official meeting mode is one of guarded optimism. We keep hearing the economy’s already hit bottom and now we’re slowly and cautiously rebounding. Radio stocks are slowly uptrending. Billing should be back to normal any day now, right? R-r-r-r-r-r-right.

Now, repeat after me. Farid and Citadel are an exception, not a rule; Farid and Citadel are an exception, not a rule. Got it? Good. Keep saying it until you believe it.

Another one. If you’re reminded that radio listening, sales, and stock prices went to hell long before the economy tanked, just keep repeating the word bellwether – as in that’s what the radio industry is to the economy.

Yes, I hate to say it. Radio continues to mire in denial.

Dickstein Shapiro proclaims that radio is still profitable (But, shhhhhhhhh! Only if its many debt issues can be resolved) so we’re as good as being back in black.

Entercom CEO David Field even mentioned a potential for radio revenues to hit double digits next year. With ham like that you’d expect a side of eggs.

I’m not exactly sure what radio plans to sell or to whom. The last time I checked one out of six U.S. consumers, who make up 70 percent of our economy, are either unemployed or underemployed or have taken have taken pay cuts.

The free spending days are over. Consumers are trying to save whatever they can. The average home is now worth a third less than two years ago.

The only consumer upticks we’ve seen came from government induced “cash for clunkers” and tax credits for environmental home improvements. Put another way – the only money that circulating in our economy right now is government money. You say housing is up slightly? It better be considering we’ve propped up Fannie and Freddie. You say the financial sector is showing growth? It better be. We’ve propped up the banks, too.

You're kidding yourself if you don't believe the banking system is still fragile. We still haven't seen bottom with commercial real estate yet. Those deals were bundled and packaged together like the subprimes and sold off to investors a few years back, too.

There are some realities radio just fails to recognize. What if we go through another double-dip recession, for example? Just asking. Have an answer?

Here's the facts, kids. Some radio groups will be history. Consider this NAB Radio Show their last hurrah.

Look at Farid. He’s about to have his suit cleaned with him in it.

How many other stations will get dumped by owners due to heavy debt, tight credit, and falling values?

Some radio CEOs are so long in the face that they look like hound dogs. When the valuations really hit the skids they’ll be the hounds of silence.

I think we'd be better off if the NAB set up a makeshift morgue in one of the ballrooms. It’s better to get the body count done before credit begins to flow. It’ll provide opportunity for new groups and those former broadcasters who’ve been sitting on the sidelines waiting for the moment when the adults will take away stations from the children who’ve broken them.

Saturday, September 19, 2009

Radio: Mr. Smith goes back to Washington

Damn it. The 22nd annual Public Radio Programmers Convention had just wrapped up. It was an encouraging, energetic convention full with creative people and innovative ideas and concepts. The one distinct difference between commercial radio and public radio is that the latter doesn’t play the victim. Nor do they have to be convinced that the future of radio is localism coupled with rights to every viable broadcasting platform. They fully recognize that their new market is on line. I was about to write something about the convention and its many creative participants when I got the news.

I’d also written up another piece congratulating the National Association of Broadcasters for not trying to jump the gun and sign, seal and deliver a new President and CEO in time for the NAB Radio Show in Philadelphia this week. That move, I wrote, would’ve harkened back to the years when do-or-die mergers would be hastily wrapped up to meet the NAB convention deadline. Remember the years when Karmazin, Ginsburg, Michaels, and others who are no longer part of the terrestrial radio cartel would strut through the halls of the NAB basking in the glory of their latest radio mega-merger?

The NAB has been without an official leader since David “Fumbles” Rehr was fired last June. That was the best news from that org is years. We got through the summer comparatively unscathed.

My take was to let the NAB Gang of Four mind the store, with COO Janet McGregor as acting President, while leaving it up to both the radio and television industry to decide whether or not one organization should handle both radio and television – or would it be best for each to have its own association.

But, no. When will I learn? Buddy Starcher was right. History repeats itself. First, as tragedy, second, as farce.

So who’s Fumbles’ follow-up?

Former Senator Gordon H. Smith, come on down.

Barring contingencies, the 57-year old former two-term Republican Senator from Oregon will officially take over Fumbles’ former functions on November 1st. He’ll make a brief appearance at the NAB Radio Show this week.

He was born in Eastern Oregon and raised in Maryland. He attended Brigham Young University and Southwest University of Law.

Before he was a U.S. Senator, he served in the Oregon State Senate, including one session, in 1995, as Senate President. He was defeated for reelection last year by Jeff Merkley, a Democrat.

Prior to entering politics, Smith took over his family's troubled business, Smith Frozen Food, one of the largest distributors of its kind in the U.S. Though he turned the business around, he was hit with charges of poor working conidtions, waste water violations, employing illegal immigrants, and low pay. Only a third of his work force was full-time and receiving health insurance. When Smith entered politics, his wife Sharon took over as its President, CEO, and board chairwoman.

Smith served in the U.S. Senate from 1996 to 2008, where his committee assignments included the Senate Commerce Committee, the panel that oversees all broadcast-related legislation.

He’s one of the guys that the NAB used to lobby. Now he goes from getting his butt kissed to butt kisser – a feat the Record Industry Association of America (RIAA) has down to a French kiss science.

He took the nets side over his constituents and consumers when he voted against the sale and use of DVRs, like TiVo. Now, he’ll have to apply reverse logic to do battle against the RIAA on Capitol Hill. The good news is that he’ll also be on the side of consumers by beating back those thieves.

Smith was considered a moderate Republican. He supported gay rights, including the Human Rights Campaign but flip-flopped with the Federal Marriage Amendment.

One of his most radical move was as chief co-sponsor of the late Senator Ted Kennedy’s hate crimes bill.

Smith’s independent streak most likely stems from being red in a blue state. How much of his purple is politically

motivated versus acting on logic and opinion remains to be seen.

As a member of the Church of Jesus Christ of Latter-Day Saints, this joke’s already making the rounds: The other unemployed Mormon, Mitt Romney must’ve turned it down. But don’t laugh. There’s a six degrees of Romney and radio as a founder of private equity firm Bain Capital, which now shares ownership of the cracked and cratered Clear Channel with Thomas H. Lee, another Boston-based p.e.f.

I don’t care if Smith’s religion calls for him to paint his face blue and howl at the moon to chase the devil away. My concern is that, unlike his fumbling, bumbling, letter-writing

predecessor, he will stand up to the radio industry's Satan - The Record Industry

Association of America (RIAA) and have enough juice on Capitol Hill to beat back those bastards and show that organization’s true colors and intentions.

So far, the NAB has given away the store these thieves time and time again. The best Fumbles could do was lob verbal dud grenades at the RIAA and others challenging the radio industry.

"I am honored to have been selected as NAB's new president and consider this an opportunity of a lifetime," sayeth Mr. Smith. "As radio and television stations embrace new technologies and new business opportunities, I look forward to articulating to public policymakers the unique and positive role played by local and network broadcasters in the fabric of American society."

"We conducted an exhaustive search to identify the very best individual to lead a great trade association," said NAB Gang of Four member and Joint Board Chairman Steve Newberry. "We're convinced we have found that person in Gordon Smith. His background as a lawyer, a statesman, and as an entrepreneur — coupled with his extensive knowledge of broadcast issues from having served many years on th
e Commerce Committee — make Gordon eminently qualified to represent the interests of free and local broadcasters in Washington."

We know he's a television guy. Whether he has the stuff to be radio's savior remains to be seen.

True, we haven’t buried the Citadel and Cumulus way of doing business deep in a cement-filled plutonium tomb yet – but we’re getting closer.

And, no, Smith has not been briefed on Clear Channel CEO John Hogan’s been there, done that, and what did it really amount to in the end style of management either.

Please, whatever you do, don’t show him the RAB’s Best of Radio website.

We don’t want to discourage him before he starts his new job.


The Cleveland Press covers the Buzzard in 1977